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Economy in Brief

U.S. Business Inventories Post Moderate Rise as Sales Remain Unchanged
by Tom Moeller  November 14, 2014

Total business inventories rose 0.3% during September following a 0.1% August gain, revised from 0.2%. Perhaps prompting the accumulation, total business sales were unchanged (4.1% y/y) following a 0.5% August slump, revised slightly from -0.4%. The resulting inventory/sales ratio of 1.30 was unchanged m/m but up versus 1.29 in Q2.

By sector, retail inventories gained 0.3% (5.2% y/y) after a 0.2% decline. Auto inventories rose 0.4% (10.1% y/y) after a 0.8% decline. Retail inventories excluding autos nudged 0.2% higher (3.0% y/y) after no change during August. Building materials inventories rose 1.0% (3.5% y/y) and clothing inventories gained 0.6% (2.1% y/y). Inventories of general merchandise ticked 0.1% higher (2.1% y/y) but furniture inventories fell 1.0% (+3.4% y/y). Wholesale inventories gained 0.3% (7.4% y/y) and factory sector inventories increased 0.2% (3.5% y/y).

Total business sales were unchanged (4.1% y/y) following a 0.5% decline. Retail sales fell 0.4% (+4.0% y/y) after a 0.6% rise while sales less autos slipped 0.1% (+2.8% y/y) following a 0.2% gain. Wholesale sales recovered 0.2% (5.2% y/y) after a 0.8% drop. Factory sector shipments rose 0.1% (3.1% y/y) following a 1.1% drop.

The total business inventory-to-sales ratio remained at 1.30 m/m but that's up from 1.29 in Q2. The retail I/S ratio gained to 1.42 in September and averaged the same for all of Q3, up from 1.41 in Q2. The ratio less autos has been unchanged since May and below Q1 of 1.24. The wholesale I/S ratio of 1.19 also was up from Q2 but the factory sector ratio of 1.30 has been unchanged all year.

The manufacturing and trade data are in Haver's USECON database.

Manufacturing & Trade (%) Sep Aug Jul Sep Y/Y 2013 2012 2011
Business Inventories 0.3 0.1 0.4 5.3 4.3 4.9 7.9
 Retail 0.3 -0.2 0.9 5.2 7.1 7.4 3.7
  Retail excl. Motor Vehicles 0.2 0.0 0.3 3.0 3.8 3.2 3.5
 Merchant Wholesalers 0.3 0.6 0.3 7.4 4.0 5.5 9.2
 Manufacturing 0.2 0.1 0.0 3.5 2.3 2.4 10.2
Business Sales (%)
Total 0.0 -0.5 0.7 4.1 3.4 4.5 10.9
 Retail -0.4 0.6 0.2 4.0 4.3 5.0 7.7
  Retail excl. Motor Vehicles -0.1 0.2 0.1 2.8 3.0 4.0 7.1
 Merchant Wholesalers 0.2 -0.8 0.4 5.2 4.3 4.8 12.4
 Manufacturing 0.1 -1.1 1.4 3.1 2.0 4.0 12.1
I/S Ratio
Total 1.30 1.30 1.29 1.28 1.28 1.28 1.26
 Retail 1.42 1.41 1.43 1.41 1.40 1.38 1.36
  Retail Excl. Motor Vehicles 1.22 1.22 1.22 1.22 1.22 1.21 1.23
 Merchant Wholesalers 1.19 1.19 1.17 1.16 1.17 1.18 1.15
 Manufacturing 1.30 1.30 1.29 1.30 1.29 1.29 1.29
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